The Industry

Wells Fargo Says It Foreclosed on Hundreds of Homes After a Computer Glitch

Sign displaying Wells Fargo logo outside the company's office.
Wells Fargo has set aside $8 million to compensate the 625 customers. Justin Sullivan/Getty Images

Wells Fargo disclosed in a regulatory filing on Friday that 400 customers had their homes foreclosed upon after the bank incorrectly denied or neglected to offer them loan modifications because of a computer glitch, Reuters reports. The company said it erroneously withheld the modifications from approximately 625 customers between 2010 and 2015.

Wells Fargo has set aside $8 million to compensate the customers. In addition, the company revealed that several government agencies are investigating the bank’s use of low-income housing tax credits. The specific agencies are not named in the filing.

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“We’re very sorry that this error occurred and are providing remediation to the approximately 625 customers who may have been impacted,” a Wells Fargo spokesperson said in a statement.

In 2009, the Treasury Department established the Home Affordable Modification Program to help people who were struggling to pay their mortgages. Wells Fargo found in an internal review that its underwriting tool was miscalculating attorneys’ fees. While those miscalculations did not result in incorrect legal charges, they did end up disqualifying customers for the loan modification program.

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The bank’s underwriting glitch is just the latest in its series of scandals and high-profile errors. Wells Fargo’s troubles came to light in 2016, when federal regulators alleged that employees had been creating millions of fake bank and credit card accounts to inflate their sales numbers since 2011, resulting in unwarranted fees for customers. Over the next year, the bank found evidence of millions of additional phony accounts. Last August, a group of mom-and-pop businesses launched a lawsuit against Wells Fargo, alleging that it had been charging them exorbitant fees for credit card transactions and early terminations. And last week, the Justice Department announced that Wells Fargo had agreed to pay a $2.09 billion fine for issuing mortgage loans based on incorrect income data.

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